UK workers suffer sharp wage fall

Incomes will be 1,520 pounds lower in real terms in 2015 than in 2010, according to Labour figures

The value of UK workers' wages has suffered one of the sharpest falls in the European Union, House of Commons library figures have shown.

The 5.5% reduction in average hourly wages since mid-2010, adjusted for inflation, means British workers have felt the squeeze more than those in countries which have been rocked by the eurozone crisis including Spain, which saw a 3.3% drop over the same period and Cyprus, where salaries fell by 3% in real terms.

Only the Greeks, Portuguese and Dutch have had a steeper decline, the analysis showed, while in Germany hourly wages rose by 2.7% over the same period and in France there was a 0.4% increase.

Across the EU as a whole the average fall in wages, adjusted for the European Central Bank' s harmonised index of consumer prices (HICP), was -0.7% and in the eurozone area it was -0.1%.

Shadow Treasury minister Cathy Jamieson said: "These figures show the full scale of David Cameron's cost of living crisis. Working people are not only worse off under the Tories we're also doing much worse than almost all other EU countries.

"Despite out of touch claims by ministers, life is getting harder for ordinary families as prices continue rising faster than wages. People on middle and low incomes have also seen tax rises and cuts to tax credits, while millionaires have been given a huge tax cut.

"Ministers keep talking about the global race, but when it comes to living standards it's clear we're losing. David Cameron and George Osborne's economic policies have badly failed over the last three years and working people are paying a heavy price."

The Opposition has sought to highlight the rising cost of living in its attacks on the Government's economic policies. Workers will have lost £6,660 by the time of the next election and incomes will be £1,520 lower in real terms in 2015 than in 2010, according to Labour analysis of Office for Budget Responsibility forecasts.

David Cameron's 35 consecutive months of falling real wages is worse than any other prime minister on record and spending power has dropped in every month but one under coalition rule as price rises outstrip wage increases. Apart from Mr Cameron, James Callaghan is the only PM on record to have overseen more than a year of constantly falling real wages, the party's analysis of Office for National Statistics figures showed.

The general secretary of the GMB union Paul Kenny said: "The Government is directly responsible for this unprecedented fall in the real value of wages in the three years since the election. Employers paying low wages get taxpayer subsidies in the form of tax credits to assemble a workforce for them to make decent profit margins. The Government has also made it easier for employers to abuse staff and made it more difficult for them to do anything about it."